The company is still grappling with the fallout from a food safety scandal and fears over a new strain of bird flu in China. Yum has placed big bets on future growth in the world's second largest economy; it operates more than 4,200 KFC restaurants in China, as well as about 800 Pizza Huts.

"KFC sales and profits in China were significantly impacted by intense media surrounding Avian flu, as well as the residual effect of the December poultry supply incident," CEO David Novak said in a statement.

Customers began deserting the restaurants in droves late last year after an investigation by Chinese food regulators found excessive levels of antibiotics and hormones in some chicken products sold at KFC locations.